Fresh & Easy Neighborhood Market Inc., the U.S. grocery chain owned by Tesco Plc, won court approval to sell virtually all its assets to an affiliate of billionaire Ron Burkle’s Yucaipa Cos.
U.S. Bankruptcy Judge Kevin J. Carey approved the sale at a hearing today in Wilmington, Delaware, after no other offers surfaced to challenge Yucaipa.
“All objections to the sale have been resolved,” Lisa Laukitis, a lawyer for the company, told the judge. “Consideration to be received is substantial and fair.”
Yucaipa, based in Los Angeles, agreed to take over about 150 of the markets and the facility in Riverside, California, where the company produces Fresh & Easy meals. It operates 167 stores in the western U.S. The deal will save about 4,000 jobs.
A Tesco affiliate is to lend the Yucaipa unit $120 million to help finance the acquisition, according to court papers. Tesco will get warrants to buy as much as 10 percent of the reorganized chain’s equity, and Fresh & Easy will get a 22.5 percent stake.
The Yucaipa buyer also offered to take on some of Fresh & Easy’s liabilities, valued at about $130 million in court papers.
The supermarket chain, based in El Segundo, California, sought bankruptcy protection Sept. 30 listing debt of as much as $1 billion and assets of as much as $500 million.
The case is In re Fresh & Easy Neighborhood Market Inc., 13-bk-12569, U.S. Bankruptcy Court, District of Delaware (Wilmington).